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Seeing Agriculture as an Engine for Economic Growth in Pakistan

Agriculture is often perceived in Pakistan as solely providing food for the poor, but it has the potential to be an engine that drives economic growth for the country. Former State Bank Governor Salim Raza emphasized the importance of the agriculture sector growing at more than four percent in order for Pakistan’s economy to reach the desired level of seven to eight percent GDP growth. History has shown that agricultural growth can lead to economic prosperity, as seen in Brazil in the 1970s, China in the 1980s, and many other developing countries.

However, the agriculture sector in Pakistan is hindered by myths, propaganda, and vested interests. This article aims to debunk these myths and shed light on the potential of the agriculture sector to salvage Pakistan’s economy. By breaking through these misconceptions, Pakistan can harness the full potential of the agriculture sector for economic growth.

Myth 1: Agriculture Plays a Minor Role in Pakistan’s Economy

Contrary to popular belief, agriculture plays a significant role in Pakistan’s economy. More than 75 percent of Pakistan’s exports are based on agriculture, such as textiles, rice, and fruits. The agriculture sector accounts for 20 to 25 percent of Pakistan’s GDP, and its impact extends beyond food production.

When the agriculture sector flourishes, it benefits other sectors such as transportation, milling, packaging, and even motorcycle sales. A study conducted by the Bank of Punjab estimated that agriculture contributes around 45 percent to Pakistan’s domestic economy. Recognizing the importance of agriculture is crucial for Pakistan’s economic growth.

Myth 2: Fear of ‘Terminator Seeds’

Paranoia surrounding seeds, particularly the fear of ‘terminator seeds’ that render soils unproductive, hinders agricultural progress in Pakistan. The truth is that better quality seeds are a driving force behind agricultural improvement. While concerns about seed quality and origin are valid, excessive regulation has hampered seed development and innovation.

Pakistan should shift from a command-and-control approach to an enabling approach for seed development. Private seed companies should be encouraged to bring expertise and capital, and trust between the private sector and the government must be established. By modernizing the seed industry and promoting innovation, Pakistan can enhance its agricultural productivity and competitiveness.

Myth 3: The Role of the Aarrhti (Middleman)

The aarrhti, often portrayed as a villain in the agricultural supply chain, plays a crucial role in securing harvests from small farmers and facilitating the movement of crops from farms to markets. The aarrhti’s claim on the farmer’s crop is based on financing the farmer’s inputs, and this chain connects one crop to the next.

Moving away from a mindset that seeks to eliminate the aarrhti, efforts should be directed towards improving the supply chain. The development of a parallel system that ensures testing, modern warehousing, fair pricing, and justice for farmers is essential. Pakistan’s electronic warehouse receipts system, implemented by the Securities and Exchange Commission and the State Bank of Pakistan, provides a scalable solution for enhancing the supply chain.

Myth 4: Water and Land Scarcity for Agriculture

Contrary to popular belief, water availability in Pakistan has remained largely constant over the decades. The misconception arises from focusing on per capita availability relative to the growing population. Pakistan’s agriculture heavily relies on water, accounting for 93 percent of freshwater usage. However, much of this water is wasted due to inefficiencies in irrigation systems and on-farm practices.

Efforts to improve water management and reduce waste are key to ensuring sustainable agriculture. Additionally, concerns about diminishing agricultural land are exaggerated, as nearly half of Pakistan’s land mass is cultivable agricultural land. The challenge lies in addressing the conversion of agricultural land into housing colonies while retaining a sufficient area for agriculture.

Myth 5: Lack of Climate Change Awareness in Rural Areas

Farmers in Pakistan, whether literate or illiterate, are acutely aware of climate change due to their dependence on weather conditions for their livelihoods. Climate change impacts, such as shifting weather patterns and extreme events, have significant implications for crop and livestock yields.

Protecting farmers from the financial distress caused by climate impacts is crucial. Crop insurance, based on satellite data and field surveys, can provide a safety net for farmers. A national social protection program that subsidizes crop insurance premiums for small farmers, similar to the Benazir Income Support Program, can mitigate climate risks and ensure the resilience of Pakistan’s agricultural sector.

Conclusion

Recognizing the potential of the agriculture sector is vital for Pakistan’s economic growth. Overcoming the myths surrounding agriculture and implementing strategies to drive innovation, improve the supply chain, enhance water management, and address climate change impacts are essential steps towards harnessing the full potential of agriculture. With the right policies and support, agriculture can be a catalyst for economic growth and poverty reduction in Pakistan.

Source: Dawn